Carlton v. Commissioner , 2 B.T.A. 1115 ( 1925 )

APPEAL OF L. G. CARLTON.

Carlton v. Commissioner

Docket No. 2167.

United States Board of Tax Appeals

2 B.T.A. 1115; 1925 BTA LEXIS 2154;

October 30, 1925, Decided Submitted July 22, 1925.

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Taxable profit determined.

F. O. Graves, Esq., for the Commissioner.

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LANDSON

Before STERNHAGEN and LANSDON.

This is an appeal from the determination of a deficiency in income tax in the amount of $522.95 for the year 1920. The only issue involved is the amount of profit realized by the taxpayer from the sale of certain property during the year in question.

FINDINGS OF FACT.

The taxpayer is an individual residing at Colorado Springs, Colo. Prior to March 1, 1913, he acquired a 6 per cent interest in the stock of the Marinette Water Power & Ice Co. of Arizona, at a cost of $3,000. Subsequently he paid assessments on such stock in the total amount of $228.59. The parties agree that the property so acquired had a fair market value of $9,360 on March 1, 1913. In the year 1915, he acquired an additional 10 per cent stock interest in the same company, at a cost of $500, increased in 1918 by an assessment of $5.99, or a total of $505.99. In 1920, he sold all the stock so acquired for $15.241.58.

DECISION.

The determination of the Commissioner is approved.

OPINION.

LANDSON: The facts involved in this appeal are not in controversy. The taxpayer asserts that his gain from the transactions set forth in our findings of fact should be determined by the simple process of subtracting the sum of the 1913 value of the first purchase, the total of the several assessments and the cost of the stock purchased in 1915 from the sales price of $15,241.58, which, as he views it, would leave a net taxable profit in the amount of $5,147.

The Commissioner contends that, as there were two purchases of stock, it must be deemed that there were two sales and the results of each set of transactions must be separately determined. The stock first acquired, together with the assessments thereon, cost the taxpayer $3,228.59. The parties agree that it had a fair market value of $9,360 on March 1, 1913. It was sold for six-sixteenths of $15,241.58, or $5,715.59, which was more than cost, but less than the value at March 1, 1913. The Board approves the Commissioner's determination that neither a deductible loss nor a taxable profit resulted from this transaction. .

The stock acquired in 1915 cost the taxpayer, including as assessment of $5.99, the amount of $505.99. It was sold in 1920 for tensixteenths of $15,241.58, or $9,525.99. The taxable profit from this transaction was the amount of $9,020.